How to Find — and Solve — the Right Business Problems

Your organization may be stellar at problem solving, but is it finding the right problems to solve? What’s worked for you in the past might not lead to breakthroughs much longer, according to SAP Chief Design Officer Sam Yen.

“The things that made you successful five years ago, 10 years ago, 15 years ago may not be as relevant today,” Yen said at SAP Leonardo Live last month. “Organizations that are able to take a step back and find the problems worth solving are the organizations that are going to have the creativity to balance the innovation equation.”

Innovation = Creativity x Execution

“This is where design thinking comes in,” Yen said.

Design’s Objective Importance

“Over the last 10 years, design-led companies have maintained significant stock market advantage, outperforming the S&P by an extraordinary 228 percent,” according to a 2014 Design Management Institute study. “Using design methods to understand customer needs better — as well as to reframe complex problems — is leading to insights that constitute strategic competitive advantages.”

Insights include refocusing IT departments on work beyond simply providing functional solutions, as CIO noted last week. In-house applications must be user-friendly, as a result of empathy, collaboration and other design elements.

“IT needs to transform from information technology to innovation technology,” SAP’s Yen said. “A lot of the perception is that information technology keeps the lights on … [but] IT organizations have to be known as the innovation technology leaders within their organization.”

Rapid Pace of Dramatic Innovation

Almost two-thirds of CEOs in the U.S. (65 percent) indicated that the next three years would be more critical for their industries than the previous 50 years, according to a 2016 study by KPMG. And more than one-third of the CEOs (39 percent) are transforming their companies into significantly different entities within those three years — often shedding their original core competencies.

“If you don’t bring big ideas into the marketplace, you don’t have true innovation,” Yen said. “You can’t just keep optimizing and making [your products more] efficient in order to keep up with the big disruption that’s coming over the next couple years.”

“This is where design thinking comes in,” SAP’s Sam Yen said of the innovation equation at SAP Leonardo Live in Frankfurt last month.

Design thinking can help find the right problems to solve.

Finding What’s Most Valuable

“Design services are integrally linked with how Leonardo projects will be implemented,” diginomica stated last month. “SAP wants to use design to help customers move forward, partnering with them in new ways.”

Innovative partnerships can help organizations solve new problems, such as improving manufacturing, personalizing products, developing new business models and more, according to Tanja Rueckert, SAP’s president of IoT & Digital Supply Chain.

“We offer you design thinking engagement to identify the highest value for your business,” Rueckert said Wednesday at the opening ceremony for the SAP Leonardo Center in São Leopoldo. “Is it down in the shop floor? Is it in the delivery? Is it in … better understanding how the consumer uses your product?”

Look (For Problems) Before You Leap

Good design relies on organizations resisting the temptation to jump right into solving the most glaring problem, according to Yen. Per 19th Century German philosopher Arthur Schopenhauer: “Talent hits the target no one else can hit. Genius hits the target no one else can see.”

“Design thinking is really about just taking a step back,” Yen said. “Do a little problem finding before you do problem solving.”

SAP’s design approach begins with exploratory workshops to find the problems most worth solving, which lays the groundwork for subsequent innovation. Then business and IT users attend discovery workshops to generate, test and get feedback from interactive prototypes via the rapid prototyping tool SAP Build — all before the solution’s delivery.

“We offer you design thinking engagement to identify the highest value for your business,” SAP’s Tanja Rueckert said at the opening ceremony for the SAP Leonardo Center in São Leopoldo.

Applying the Innovation Equation

“The concept of testing new ideas is simple — talk to actual customers,” CLO Media stated last month. “That’s difficult for a lot of companies to do, particularly in the digital age.”

Technology, business practices and boundary conditions have changed, and they’re still changing. That makes design thinking a crucial part of finding the right problems to solve in order to stay ahead of the power curve.

Talking to each other — customers, partners and vendors — is key to unlocking unprecedented creativity. Pair that with outstanding execution, and you’re on your way to game-changing innovation.